990529 Ag Co-ops Farmland & Cenex Plan to Merge

Kansas City, MO - Farmland Industries Inc. and Cenex Harvest States Cooperatives plan to combine the two agricultural cooperatives, creating an agricultural giant with $20 billion in annual revenue.

Resolutions supporting the merger were approved by Farmland directors in Kansas City and by the Cenex board in St. Paul, Minn.

"We see complete consolidation as an important step for our member-owners in the rapidly changing global marketplace," Farmland chairman Albert Shivley and Cenex co-chairmen Gerald Kuster and Elroy Webster said in a statement. "Bringing Cenex Harvest States and Farmland together should provide greater opportunities for future growth and cost benefits that will position our farmer-owned system for success.

The two companies hope to complete a study on the feasibility of the merger and receive required governmental approval by late this year.

Member information meetings would take place in early 2000, followed by a vote of the memberships of both cooperatives. The companies have tentatively set June 1, 2000, as a goal for completing the transaction.

The companies said they hope to combine the two companies with minimal effect on employees.

Farmland and Cenex have been involved in separate discussions on combining their grain operations and their petroleum refining and pipeline businesses. The companies already have an alliance in the sales, distribution and marketing of petroleum and related products and another joint venture involving the manufacture of pet foods.

Farmland is the largest farmer-owned cooperative in North America with 1998 revenue of $8.8 billion in all 50 states and 90 countries. When including Farmland's share of the sales of its affiliated businesses, sales were $11.9 billion.

Farmland's business lines include crop production and crop protection products, livestock feeds, petroleum, grain processing and marketing, and the processing and marketing of pork and beef products.

Cenex is a cooperative system owned by farmers, ranchers and local co-ops from the Great Lakes to the Pacific Northwest and from the Canadian border to Texas. 1998 revenue was $8 billion.

Cenex also operates oil refineries and pipelines and provides a wide variety of products and services ranging from grain marketing to food processing.

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